This Is How Newcastle Do Business – Other Clubs Could Take Note

Written by Dr. Ed Harrison

11:28pm Thursday, March 8th, 2012

Commented 112 times

Newcastle issued their financial results for the year ended June, 2011 today, and it made for some positive reading.

Derek Llambias – very good financial results The previous year was through June of 2010, so remember Newcastle were in the Championship that year, so they are not much better this last financial year for one big reason that Newcastle were back in the Premier League.

Their revenues from TV tripled last year compared to the previous year, and total revenues (turnover) increased to £88.4M from £52.4M and the losses decreased to £3.9M from £33.5M the previous year.

We put out a report earlier today on the figures and discussed them and included graphs of the revenues and losses over the last four financial years, and it makes for some positive reading and some good trends.

It’s not surprising that Derek LLambias has come out and talked even more about the figures and how Newcastle have put their financial house in order, while still improving the playing quality of the side.

We are currently 6th top of the Premier League – which is an excellent achievement – so far this season, and we just hope we can keep it up over the last 11 games of the season.

This is what LLambais had to say on a wide range of issues:

“If Mike had not come in at that time, the club would have been in dire, dire trouble.” “It would have been another Portsmouth – maybe worse, because it is so big, it is such a big club.” “Our model is working, and we have not downgraded the team.”

“We never want to waste the club’s money – the fans’ money. No crazy salaries like they had before.” “Hopefully we are now being the custodians that we are meant to be. It would be lovely if we were all hand in hand – the club and the fans.”

“The owner doesn’t take a penny out, but that’s what people don’t believe. These figures show he doesn’t.” “We’re getting over the bad parts. We have apologised for the mistakes. We did make mistakes that were naive and for a combination of factors.”

“Now we’ve got full control of the direction. We’re going to get there, in a very responsible way, without endangering the future of the club.” “The divide shown by some of these financial figures is huge.” “We are punching above our weight at the moment. “

“You look at some of those figures and you wonder how are they going to survive.” “Can the owners just keep pumping money in? Maybe some of the foreign ones can, but I’m not sure about the UK-based owners.” “The tradition and the history will still be there.”

“It’ll be fantastic if we can bring a trophy to the club. That would give us a feeling of, ‘It worked.’” “We’ve got a manager hungry for a trophy, a team that we’re building, staff and players on long-term contracts, and we’re investing in the future.” “It’s been an exceptional season.”

“Now it’s a case of pushing forward. This season we targeted tenth or above. Next season it was going to be eighth.” “We just do straight contracts. We do no overseas pensions, no image rights. We say, ‘This is your money, now you go away and talk to your tax advisers if you must.’ “

““We don’t do goal bonuses. We had that with Martins, maybe that’s why he would always shoot from the halfway line!” “We used to see him on the ball and think, ‘Oh look. He’s going to shoot again.'” “We’ve taken all that stuff out. We know exactly where we are.” “We do have team bonuses for success, in terms of positions.”

“We would like to see deferred transfer payments phased out, so that you just pay for a transfer over a year.” “Why pay for it over five years? Most do it.” “We prefer to pay it over a short period of time. This was put to the Premer League board in 2010 and was rejected by everybody.”

“We are saying it should be discussed. You shouldn’t be spending money you haven’t got. It’s not the right way to behave.” “And look at the taxman. Why is the taxman giving clubs so long to pay their tax bills? For instance, VAT – it should be paid on the dot. It’s a crazy way of running a business.”

“And is the creditors rule right in football? Footballers are getting paid, but the local tradesmen who have done work for the club aren’t and it is costing jobs.”

That’s interesting about not giving bonuses for goals, so the Demba Ba is not incented that way – hopefully the club will renew the Senegal striker’s contract before the summer, so we have a decent chance of keeping him at the club.

Newcastle also pay for their transfers up front in full, and in cool cash, and that’s news about trying to get the Premier League Board in 2010 to be the way transfer business is conducted by all clubs.

It certainly would help those clubs who vastly pay out money they simply don’t have, and not end up in bankruptcy as we have seen recently with Glasgow Rangers and Portsmouth – among others.

If Mike Ashley was going to invest around £300M into a project to make money, he could have found much better investments than in a football club – it’s very hard to make money in sports.

Ashley has loaned the Newcastle club £140M over the last few years, and it doesn’t seem like he wants repaid anytime soon, and of course he’s not getting any interest from that loan.

So at least financially Ashley and LLambias have done very well since we were relegated – there’s no doubt about that.

We only wish they would try much harder to get a better and improved relationship with the Newcastle fans, who still distrust the two of them and their motives.

But there’s no doubt that Newcastle United are coming back both on and off the field – and that has got to be good.

Well, I have to say that it surprises me to hear DL speak that way on so many aspects of the clubs finances – ther’es a lot of er…. sense…. and er….sense in there. I feel disarmingly at a loss to argue with most of the points he’s making. Makes a lot of sense in the simplicity of their contracts, loved the Martins goal bonus thing lol. Now that really does make sense when I think back! I need to get some sleep and look at this in the morning so I can get back to not trusting the guy properly again!

It does make a lot of sense Tsunki. I’m rationalising agreeing with him by reminding myself that he’s a grade a knob rocket 😀

Just got back in from the reserve game. The police have a lot to answer for, the way they handled fans after the game was an absolute disgrace. One mackem was grabbed by the throat and thrown at least 3 or 4 feet, while a Toon fan was punched square in the face by an officer – I saw nowt to warrant that reaction. As for the fans in the ground ripping off the hoardings, it was mainly a group of young lads trying to be clever. I think I was more impressed by how easily they came off – you know the corrugated plastic that you see on “For Sale” signs? It’s that stuff glued onto plywood backing. One lad must only have been 13 or 14 and pulled an entire section off himself o_o

Thump – fantastic outing then. I was taking my lad out for a last driving lesson before his test tomorrow and was rationalising with him how it was better to do this rather than go see the stiffs for nowt, whilst all the time not believing my own slaver. Now I’m sort of glad I didn’t bother. What was the crack with the bill, then? Bored? Miss out on some good ol’ G8 head-bashing at the proper derby did they? I remember a couple of derbies ago when my bro-in-law got whacked by a copper on his leg for absolutely nothing, it was black n blue for weeks he could hardly stand up. This game I was walking to the ground from Stowell Street and I heard one rozzer say to the other they should have worn their s*nderlan’ shirt for today – maybe that’s a clue to who the force draft in for these things? Don’t get me wrong I have total respect for the law and it must be crap to police two sets of savage fans but sometimes there’s a rogue element just as there is with the fans, only they have the power to put you in the back of a van and tenderise your ribs legally which is always a bit of a worry when you’re just out to atch a match with the boy…:(

On the hoarding quality, I guess that tells you a bit about where the savings are made lol – lots of tacky advertising! Like the SD dot com tv advert, man that does my head right in!

AndyMac – you may have sensed that there is a slight amount of reservation in my grudging acknowledgement. He does cut a conciliatory rug though. I take it he still hasn’t made it on to your card list then? 😉

Andy how are we no better off? we aren’t paying extotionate wages. we are pushing for Europe. we have better players. we are on a solid financial base. we are planning ahead. what is it about that which makes us no better off?

“AndyMac – you may have sensed that there is a slight amount of reservation in my grudging acknowledgement. He does cut a conciliatory rug though. I take it he still hasn’t made it on to your card list then? 😉

I did Tsunki and I’m not likely send him anything while there are so many muppets about who he can manipulate with his bullshlt. Just goes to show you can fool some of the people all of the time even when the stadium is renamed for Fatmans benefit – NOT OURS !!!!!!!

AndyMac – you may be in danger of looking a teensy bit irrational. How would you explain the simple equation of wage bill in championship versus same in 6th place premier league this year? Also do you think we would be doing this well with the old No9 on the bridge?

“Andy how are we no better off? we aren’t paying extotionate wages. we are pushing for Europe. we have better players. we are on a solid financial base. we are planning ahead. what is it about that which makes us no better off?”

In trading terms planbilly. We were turning over approximately £88m the year we were relegated albeit with a higher wage structure which any normal owner would have seen to after taking over from SJH and the other Fatman.

On the pitch I think we’ve moved backwards despite the fact that our squad is probably the best since SBR’s time and 6th in the league will eventually translate to 7th or 8th before the season ends. Which wins us nowt !

so what you’re saying is because any new owner would have reduced the wage bill that makes the fact that ashley did it redundant? financially we are in a better place because while our turnover is the same our outgoing are substantially less. i understand where you’ve started but i don’t get how we are not better off here. and if our team is better then how has it gone backwards. you’ve confused me there

Yes, Andy Carroll did get sold, Yes stadium name changed, and Yes I have called Mike names before.

But, we all just have to realize, he is here for the long-term. Each and everything we own, we don’t want them ugly. Well, same for Mike, he owns this club, doesn’t want it ugly, and corrupted. He has done several unfavorable things at this club. But, those digits, tell the whole story. It gets ugly before you see the beautiful side. Just like rebuilding a house. First, looks like crap, then you see the beauty. Well, the revenue is up, losses are cut, and we are close to breaking even. Who knew we would of been in this position before this season? The goal was top 10, we are in 6th, and most likely will finish season off in top 5, hopefully 4th, most likely if we beat arsenal at their ground on Monday. We have to just go with it, and respect what we have….

@27 Andy you explain yourself better here but you surely see they have learned from mistakes. trying to make it work. i don’t completely trust them but we are in a better position now than just before shepherd sold up

@Tsunki: Couldn’t tell you mate. Spoke to a few Mackem’s who agreed that the police were a bit edgy and were probably looking for bother but it amazes me how they can be so flagrant with it. There was a young lad standing next to me and my mate with his older brother who got pushed aside by one of the officers and had I not have been there, he’d have been over the seats. The same lad almost had one of the ad hoardings bounced off his head – it’s okay though, my head broke it’s fall.

The Mackem lad who was grabbed by the throat was one of three who were being escorted back to the stadium (after obviously having made their own way out)… so they had got at least a block away (can’t think of the name of the street atm) before being pulled back through hundreds of young lads… they just made matters worse. Even if they had been causing bother, why not just arrest them on the spot rather than trapse them all the way back through the crowds? Doesn’t make sense mate!

Financially we’re no better off than we were when Fatman came riding in on his white horse. The club has almost gone backwards in turnover terms and is now way behind Tottenham (as a reasonable yardstick club size etc etc) and unlikely to reach the magic £100m plus for another year or more – increasing the gap between us and the “Top Six”.

In playing terms we were average mid table before Fatman arrived and we’d won nowt. So unless you’re gonna tell me the trophy cabinet is now chokka full of recent successes, I’d have to say we’re no further forward as 6th or 7th aint gonna win you any more apart from a few more Sky TV quid for Fatman to bank ?

right Andy i see your point there. you’ve worded it well and have avoided abuse so i respect you for that. however, we were a lower-mid table side, or fast becoming one, when he took over. if we qualify for Europe we will be much better than mid table. 6th is 1 place off 5th and Europe. we have all but moved backwards turnover-wise. but we are now moving forwards at a faster rate in my eyes and will catch up on this (at least) one year of “what if” time. all i am concerned with is that we are moving forwards now. we were not before.

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